Distribution in Latin America
1. REGISTRATION OF TRADEMARKS AND LOGOS.
Prepare a trademark status report and send it to .
2. DURATION OF AGREEMENT.
Distributors based in the Colon Free Zone of Panama will have rights to market and sell the products in Central America, Colombia, Venezuela, Ecuador and the Caribbean and require time to develop these markets. Thus, all agreements negotiated by Latin Licensing, LLC to date have been 5 years with an automatic 5 year renewal term.
3. DESCRIPTION OF PRODUCTS.
Please define the products with as much specificity as possible (e.g., mens and womens jeans made of denim, corduroy, twill and sheeting). Some categories of apparel are (i) accesories, (ii) activewear, (iii) belts, (iv) big and tall, (v) caps and hats, (vi) casual pants; (vii) dress shirts; (viii) formalwear, (ix) hosiery, (x) jeans, (xi) jewelry, (xii) knit shirts, (xiii) leather, (xiv) loungewear, (xv)outerwear, (xvi) perfumes, (xvii) shorts, (xviii) slacks, (xvix) sportshirts, (xx) sportswear, (xxi) sweaters, (xxii) swimwear, (xxiii) t-shirts, (xxiv) tailored clothing and (xxv) underwear, to name a few. The product description will be included in the distribution agreement.
4. TERRITORY.
What are the countries available for distribution? These can be countries in which the trademarks and logos have not yet been registered or where there are third party "pirate" registrations: these countries can be included in a distribution agreement subject to the assignment of the applicable trademarks by third parties or the courts (the assignment of the trademark is contingent on the registered owner’s or court’s transfer, which should be contemplated in any agreement).
5. DISTRIBUTION OF PRODUCTS; STAND-ALONE STORES; PANAMA FREE ZONE.
Can the distributor appoint sub-distributors in the territory granted or must the distributor sell directly to retailers? Are there prohibitions against sales of first quality goods to certain types of retailers, such as mass merchandisers or outlets? What are the minimum standards of acceptable retailers?
Can the distributor open stand-alone stores using the trademark as the store name or is a separate agreement (such as a store franchise) required? If the distributor can open stand-alone stores using the trademark as the store name, do you want approval rights as to location of each store, the appearance of the stores, in-store merchandising, etc.? How much time does the distributor have to change the store name after termination or expiration of the agreement?
Are you familiar with the Panama Free Zone? Do you understand the benefits of operating out of the Panama Free Zone? The Panama Free Zone is the second largest free zone in the world (after Hong Kong) and it is the principal distribution point for merchandise to Central America, Colombia, Venezuela, Ecuador and the Caribbean. Almost all the major apparel companies have licensees or distributors who operate out of the Panama Free Zone.
6. TARGET MARKET AND SUGGESTED RETAIL PRICING.
Who are the consumers of your products (e.g., men, women, children, infants, big and tall, maternity, etc.)? What is the U.S. suggested retail prices for your basics and fashion lines? .For example, "The company is predominately a jeanswear company based in New York City with sales throughout the U.S.A. Our product lines include denim jeans and khakis for men, women and children. The average U.S. suggested retail price for mens or womens basic jeans is $48.00 and $54.00 for khakis. The U.S. suggested retail price for childrens jeans is $28.00 and $34.00 for khakis." The foregoing information will allow Latin Licensing, LLC to identify a potential distributor that serves your market segment in the territory.
7. .WHOLESALE PRICING AND FINANCING TERMS.
What are the regular wholesale prices and what discounts will you provide off regular wholesale price? Will you require payment via letter of credit or will you provide unsecured financing? Can the distributor buy first quality goods factory direct at cost plus a mark-up? If yes, where do you manufacture your goods? Do you plan to produce your goods in the Western Hemisphere (such as in Mexico) to take advantage of free trade agreements throughout the Americas? If yes, when will you start production? How often must a distributor place orders and what is the order procedure? What support will you provide to distributors?
8. .ADVERTISING.
How will you help the distributor to advertise your products within the territory? Will you provide camera ready materials? Will you assist in the preparation of bill board advertising, print media, etc.? Can the distributor develop its own advertising materials? If so, what are the approval turn-around times and costs (if any) for such approvals?
9. .SERVICES TO BE PROVIDED TO DISTRIBUTOR.
What support will you provide to distributor? Will you provide fixtures or specifications thereof? Do you have a "shop-in-shop" design consisting of flooring, fixtures, lighting, paint, and point of sale materials? Do you have a soft shop design (a soft shop excludes flooring, lighting, and paint, but includes stand-alone fixtures and point of sale materials)? What point of sale materials do you offer and must they be purchased or will they be supplied for free? .Will you place advertising in the applicable countries?
10. TRADEMARK INFRINGEMENT AND ANTI-COUNTERFEITING ACTIONS.
Who is responsible for taking actions against alleged trademark infringement (normally, it's the trademark owner)? Who is responsible for taking anti-counterfeiting actions? If the distributor is responsible for anti-counterfeiting enforcement, what assistance (including financial) will you provide to the distributor? Will your company grant special powers of attorney to your distributor to undertake proceedings against counterfeiters of your products in Latin America and the Caribbean in your name? . Will the powers of attorney grant authority for both criminal and civil proceedings? .If not, why not? .If civil proceedings can be brought against alleged counterfeiters and damages are obtained, can the distributor keep the damages? .If you are not willing to grant special powers of attorney to the distributor, or its attorney, are you prepared to take legal actions against counterfeiters and, if so, who bears the cost? Are you aware of counterfeiting of your products in the region where you want to distribute your products? If yes, what actions have you taken against alleged counterfeiters?
11. .ISSUES RELATED TO EXPIRATION OR EARLIER TERMINATION.
What happens to the inventory licensee has on hand at termination? Do you or the new distributor want a right of first refusal to buy all or some of it? If so, at what price? Does the distributor have a sell-off period? If so, how long is this period (e.g., 6 months)? What happens to the remaining inventory after the sell-off period?
12. QUALIFICATIONS OF DISTRIBUTOR.
What are the qualifications which a prospective distributor must meet (e.g., experience in mens apparel, minimum financial strength, minimum infrastructure requirements, etc.)? What type of investment do you expect the distributor to make (e.g., open one or more showrooms, open stand-alone stores, advertising, etc.)? Can your products be displayed in a showroom with other brands or must your products be displayed in a showroom exclusive to your products?
13. CURRENT SALES TO LATIN AMERICA OR THE CARIBBEAN.
Do you currently sell products into Latin America or the Caribbean? If so, to what countries? Are sales consistent (i.e., do you have an established client base in one or more countries)? Are you aware of any companies in the U.S. which sell your products into Latin America or the Caribbean? If yes, what efforts will you take to impede diversion of your products into Latin America and the Caribbean by your customers?